This is the smallest personal loan you can get.

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Lenders usually have minimum and maximum amounts that they are willing to provide. If you check out The Ascent best personal loans, you will notice that the minimum loan offered is $ 1,000 and the maximum loan is $ 100,000. Of the eight lenders on the list, only one allows loans up to $ 1,000.

The minimum amount varies depending on the lender – sometimes thousands of dollars. This fact underlines the importance of buying rates from several different lenders. By shopping around, you are more likely to get an offer that comes closest to the amount you really need. And if your credit rating high enough, you shouldn’t have any problems with qualifications.

Choosing the right lender

When purchasing any personal loan, it is wise to compare all the costs associated with the loan. In addition to the interest rate, some lenders charge:

Let’s say you only need to borrow $ 1,500 and Lender # 1 offers a minimum loan amount of $ 1,500. So far, so good. However, if Lender # 1 charges an 8% initiation fee and a 2% prepayment penalty, this may not be the best deal.

What if Lender # 2 offered a minimum loan amount of $ 3,000, but his interest rate was lower and they did not charge a loan disbursement or early repayment penalty? It might make sense to take a loan from a lender with a higher minimum loan amount, pay back what you don’t need immediately, and take advantage of their better terms to pay off the remainder of the loan.

Remember, even if you pay off half of the loan right away, your monthly payments will remain the same. However, making this monthly payment on the reduced balance will ensure the early repayment of the loan.

Benefits of a small loan

Applying for a small loan is wisdom. Getting a small loan is a good way to get a loan or improve your credit rating. In addition to increase in your credit when you repay the loan as agreed, the small loan allows you to cover the financial obligation without incurring more debt than necessary.

Read the fine print

As with any loan, it is important to understand what you are signing. Small loans are less attractive to lenders than large loans for one important reason: the lender does not receive the same amount of interest. For this reason, some lenders apply all sorts of junk fees to offset the interest they would have earned if you borrowed more money.

Other small loan options

If you’ve been shopping with lenders but couldn’t find a loan that works for you, consider the following options:

Personal bank or credit union

Any financial institution you have a relationship with can check your banking history and see if you can repay the loan. Plus, because they want to keep you as a customer – or, in the case of a credit union, as a member – they’re more likely to miss out on small credit issues.

Credit card incentive rate 0%

Before making a decision get a personal loan, look for alternatives such as a credit card. In an effort to attract new customers, credit card companies sometimes offer 0% promotional rates. These courses usually last 12 to 18 months. So if you have a good credit rating, you can get Credit card with 0% annual interest rate offering interest-free payments for up to a year or more.

Family and friends

If the amount you need to borrow is small and you have a reputation for paying off debt as promised, it doesn’t hurt to ask for a loan from someone close to you. If they agree, write a contract that clearly states how much you do, whether you pay interest, the amount of monthly payments, and when the loan must be paid in full.

The bottom line is this: next time you need a small loan, don’t just look at lowest amount you can borrow… Look for a lender that offers funds at the lowest net price. And consider the other options available.

For more information, check out our guide on “How personal loans work? “

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